E:5

King's Department Store is contemplating the purchase of a new machine at a cost of $22,115. The machine will provide $5,000 per year in cash flow for seven years. King's has a cost of capital of 9 percent. UseAppendix Dfor an approximate answer but calculate your final answer using the financial calculator method.

a.What is the internal rate of return?(Do not round intermediate calculations. Enter your answer as a percent rounded to 3 decimal places.)

Internal rate of return%

b.Should the project be undertaken?NoYes